5. A firm has the capacity to produce 1,000,000 units of product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000. Annual fixed costs are P250,000 and the variable cost per unit is PO.70. What is the profit or loss if the firm can increase its sales to 80% of full capacity assuming that its selling price and variable costs per unit remains constant.

5. A firm has the capacity to produce 1,000,000 units of product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000. Annual fixed costs are P250,000 and the variable cost per unit is PO.70. What is the profit or loss if the firm can increase its sales to 80% of full capacity assuming that its selling price and variable costs per unit remains constant.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8. Consider a firm's short run and long run average costs depicted below: 300 270 240 210 180+ Wunt 150 120+ 90 60 30 ---- W X AC LRAC 200 400 600 800 1000 1200 1400 1600 1800 2000 # of units Suppose this firm has been producing 400 units per month for a long time. If it decides to increase its output to 800 units per month, then its average cost will O A. fall from $300/unit to $150/unit initially, then rise to $240/unit eventually. O B. fall from $300/unit to $60/unit initially, then rise to $240/unit eventually. O C. fall from $300/unit to $60/unit and remain there. O D. fall from $300/unit to $240/unit and remain there. O E. rise from $150/unit to $240/unit initially, then fall to $60/unit eventually. OF. rise from $150/unit to $300/unit initially, then fall to $60/unit eventually. O G. fall from $150/unit to $60/unit and remain there. OH. rise from $150/unit to $240/unit and remain there.
Management believes it can sell a new product for $8.50. The fixed costs of production are estimated to be $6,000, and the variable costs are $3.20 a unit. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Loss) 0 500 1,000 1,500 2,000 2,500 3,000 Determine the break-even level using the above table and use the following Equation to confirm the break-even level of output. PQB = FC + VQB PQB - VQB = FC QB (P-V) = FC QB = FC P-V What would happen to the total revenue schedule, the total cost schedule, and the break-even level of output if management determined that fixed costs would…
b. The following are costs and revenues incurred by an ice cream company in short-run production. Fixed cost (month) : RM 5 000 1 200 Rent Interest on loan Premium insurance 600 Variable cost (month) : Wages Maintenance 8 800 300 Utilities 2 200 Raw material 9 600 2 000 Transportation Owners salary before start producing own ice cream firm 54 000 Revenue (month) : Price per one cone ice cream RM5 Operation days Average customer per day 26 days 250 customers Based on the above information, calculate: i. Total revenue ii. Total cost iii. Economic profit From the answer to question (iii), what can you advise the ice cream maker?
← A brewery produces regular beer and a lower-carbohydrate "light" beer Steady customers of the brewery buy 10 units of regular beer and 15 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $29,000 and the cost per unit of light beer is $50,000. Every unit of regular beer brings in $200,000 in revenue, while every unit of light beer brings in $500,000 in revenue. The brewery needs at least $15,000,000 in revenue, and has determined that the total demand will be at least 48 units of beer. Complete parts (a) and (b) CITTS (a) How much of each type of beer should be made so as to minimize total production costs? units of regular beer and units of light beer should be made, for a minimum total cost of $ $0 (Type integers or decimals) (b) Suppose the minimum revenue is increased to $15.700,000 Use shadow costs to calculate the total…
The real question is not the ones I posted those are what you need the real question is at the profit maximizing level of production. A)Total revenue will be , and profit will be
3
Assume the following cost data are for a purely competitive producer Total Product AFC AVC ATC MC 0 1 $60 $45 $105 $45 2 $30 $42.50 $72.50 $40 3 $20 $40 $60 $35 4 $15 $37.50 $52.50 $30 5 $12 $37 $49 $35 6 $10 $37.50 $47.50 $40 7 $8.57 $38.57 $47.14 $45 8 $7.50 $40.63 $48.13 $55 9 $6.67 $43.33 $50 $65 10 $6.00 $46.50 $52.50 $75 In the table below, complete the short run supply schedule for the firm (columns 1 and 2) and indicate the profit or loss incurred at each output (column 3) 1 2 3 4 Price Quantity supplied, single firm Profit (+) or loss (-) Quantity supplied, 1500 firms $26 $32 $38 $41 $46 $56 $66
Q3 need in 10 minutes
Question 9 of 20 Total Total Average Average Average Fixed Variable Total Marginal Variable Fixed Cost $200 Output Total (Q) Cost Cost Cost Cost Cost Cost $0 $200 $200 $150 $350 40 $200 $250 $450 60 $200 $450 $650 80 $200 $800 $1,000 For the cost data shown above, what is this firm's Average Fixed Cost when Output (Q) is 20? $10.00 $2.50 $200 O $5.00 20
7. A fixed cost is an expense incurred by firm that does not change with output. True False
. What are the firm's fixed costs?$ c. What is the variable cost of producing 475 units of output (use least-cost)?$ d. How many units of the variable input should be used to maximize profits?e. What are the maximum profits this firm can earn?$ f. Over what range of the variable input usage do increasing marginal returns exist?From ___ to ____g. Over what range of the variable input usage do decreasing marginal returns exist?From ___ to ___h. Over what range of input usage do negative marginal returns exist?From ___ to ___ . What are the firm's fixed costs?$ c. What is the variable cost of producing 475 units of output (use least-cost)?$ d. How many units of the variable input should be used to maximize profits?e. What are the maximum profits this firm can earn?$ f. Over what range of the variable input usage do increasing marginal returns exist?From to g. Over what range of the…
2. Consider the following costs of owning and operating a car. A $25,000 Ford Taurus financed over 60 months at 7 percent interest has a monthly payment of $495.03. Insurance costs $100 per month no matter how much you drive. The car gets 20 miles per gallon and uses unleaded regular gasoline that costs $3.50 per gallon. Finally, suppose that wear and tear on the car costs about 15 cents per mile. a. Which costs are fixed b. Which costs are variable? c. In deciding whether or not to drive from New York to Pittsburgh (about 1,000 miles round-trip) to visit a friend, which costs should count?